Rising Stock Levels & Cheaper Crude Oil Put Downward Pressure on Pump Prices

WASHINGTON, D.C. — For the first time since November 2020, the national average gas price has declined week-over-week to reach $2.86 per gallon, reported AAA.

In addition to this 2-cent drop, 45 states have seen their averages decrease or not change on the week.

"Growing stock levels and cheaper crude oil prices are putting downward pressure on pump prices for the majority of motorists," said Jeanette McGee, AAA spokesperson. "These are positive signs that less expensive gas prices could be around the corner, but not enough to indicate a steady trend just yet."

Demand is a notable factor influencing gas prices. According to the Energy Information Administration, demand has risen from 174,000 barrels per day to 8.6 million barrels per day. This is just 222,000 barrels short of one year ago when demand began to slip early in the COVID-19 pandemic.

If demand continues to increase, prices could follow, reported AAA. Gasoline stocks also saw a moderate increase with a build of 200,000 barrels per day. Additionally, refinery utilization reached 82 percent, which indicates a larger build in stocks could occur in the near future and help keep fuel prices in check.

Despite the weekly price drop, the national average gas price is 15 cents more expensive than a month ago and 84 cents more expensive than a year ago. These gaps are likely to widen over the coming weeks as gas prices and related factors began to take a sharp turn at this time in 2020.

The top 10 most expensive averages in the country are California ($3.87 per gallon), Hawaii ($3.64), Washington ($3.32), Nevada ($3.31), Oregon ($3.17), Utah ($3.15), Alaska ($3.11), Arizona ($3.09), Washington, D.C. ($3.03), and Idaho ($3.03)

The top 10 weekly changes include declining averages in Kentucky (down 6 cents per gallon), Delaware (6 cents), North Carolina (4 cents), Maryland (4 cents), Illinois (4 cents), South Carolina (4 cents), Florida (3 cents) and Pennsylvania (3 cents), as well as rising averages in Hawaii (up 5 cents) and Idaho (up 4 cents).

A wild card in the price of crude oil is the multi-day blocking of the Suez Canal, a major international oil supply route, by the container ship Ever Given. This could result in delayed oil deliveries. However, it is likely to have limited impact in the United States due to domestic oil production keeping supply balanced and prices stable, reported AAA.